Spring 2020 Real Estate Forecast
I service primarily Monmouth and Ocean Counties in New Jersey. As I assess the public policy changes regarding COVID-19, I'm taking a hard look at the actual and potential impact on the real estate market. I wanted to share my thoughts with potential buyers and sellers so that we make the best decisions together. I've focused this blog on the changes expected in pricing along three time lines: Immediate impact, Short-Term Impact and Long-Term Impact. Home prices are not the only measure of market strength, but it is the most visible. My goal is to make sure you are ready to take advantage of whatever market we are in.
Some sellers concerned about their exposure to COVID-19 are taking their homes off the market, at least temporarily. Others, however, fear prices will fall and are rushing to get their home on the market. For now, home prices remain at the top of the market. Sellers who need to sell quickly, however, are doing price reductions. Buyers watching a particular property may find that it suddenly disappears. What should buyers and sellers do? Assess your reason for moving. If that has not changed then now is the time to take advantage of the real estate market. Waiting to see what happens may not be in your favor.
It's unrealistic to think that the real estate market will escape the impact of shutting down the economy. That impact will be most visible in home prices. I fully expect home prices to moderate. How much will depend on how long we are under a "shelter in-place" order by our Governor. Since some buyers, that were planning to buy in the short term, have lost income, there is the potential that they may be out of the market for another year. Fewer buyers, means fewer offers, which means seller's and their agents have to work harder to attract buyers. For sellers that also plan to buy, this could be a wash. Why? Because if your home price drops 5% so too the house you plan to buy.
This is unknown. As of the writing of this blog, New Jersey is still on lock down, and all non-essential businesses are closed. Real Estate Agents and brokers agree that we are at the top of the bottom of the market. We are sitting on the top of the market now. Prices will likely come down. How far and how fast is simply unknown.
Since every business needs to stay afloat we must adjust and take care of our clients and customers now to ensure that there is future business. Here is how I am servicing my current and potential clients: When COVID-19 hit I had properties under contract, active listings and buyers searching. The pandemic has required that I, along with everyone else, quickly adapt. Here is what am I doing:
1. Watching home prices and activity even more closely
2. Having regular conversations with lenders to stay on top of their changing landscape
3. Working with all parties to make my current transactions "air-tight"
4. Speaking regularly with buyers that plan to buy in the next 3 to 4 months
5. Speaking with potential sellers to review not just prices but their entire financial picture
6. Scheduling virtual open houses with sellers
7. Scheduling professional virtual tours when possible
As you assess your need to sell and/or buy real estate, understand that this current environment will change. My goal is to make sure you are ready to take advantage of it now or in the future.